Obama's re-election budget

Why his 'shared sacrifice' proposal speaks to Americans

After hearing President Barack Obama's robust response to their budget-cutting proposals, Republican leaders seemed shocked to hear that the president sounds like — gasp! — a Democrat.

At least Senate Minority Leader Mitch McConnell knew what was at stake: next year's elections. "We will not solve our problems until (the president) stops campaigning," the Kentucky Republican scolded, "and joins us in a serious, bipartisan effort to change not only his tone but his direction."

Of course the president's re-election campaign has only begun, and his deficit reduction speech Wednesday at George Washington University sounded like the opening volley. House Budget Committee Chairman Paul Ryan, R-Wis., who unveiled the 10-year Republican deficit-reduction plan to which Obama was responding, sounded downright angry and hurt afterward. The president's "olive branch," Ryan said, turned out not to be "building bridges, but poisoning wells."

He also found the speech to be "excessively partisan, dramatically inaccurate and hopelessly inadequate to addressing our country's fiscal challenges." Actually Obama, in so many words, said the same about Ryan's proposal. Nobody should be shocked to hear politics has crept into the budget debate. Budgets are, by their nature, moral and political documents. Politics shape the debate.

Welcome to the 2012 presidential campaign. As a Democrat proposing budget-cutting measures, Obama is fighting on his rival's turf. Republicans enjoy cutting revenue as much as Democrats enjoy finding attractive ways to spend it. But Ryan, one of his party's most influential voices on economic matters, provides an excellent example of the sort of vision that Obama is eager to campaign against.

Both plans would find $4 trillion in savings, Ryan's in 10 years, Obama's in 12 years or less. That matches the $4 trillion goal set by Obama's nonpartisan Simpson-Bowles commission to cut spending by 2020.

But Ryan's plan is so far to the right that it leaves ample space for Obama to seize the political middle ground. It also enables him to throw enough red meat or, if you prefer, low-calorie vegetarian plates, to his left-leaning base to signal that he has not forgotten how to fight for principles.

Ryan's plan provides no new taxes or other new revenue. Instead it cuts programs for the needy and uninsured, particularly Obama's health care plan, and awards huge tax cuts for corporations and the wealthy. It pushes Medicare toward a privatized voucher model for those who are younger than 55 now. It would convert Medicaid into annual block grants to the states based on their low-income population, leaving it up to the states to pay for shortfalls.

Ryan also would undo the financial regulations that were put in place after the 2008 Wall Street meltdown, even though deregulation contributed to the crisis.

In short, Ryan's idea of sacrifice to reduce spending relies heavily on those who most likely rely on government for help — and, in many cases, are least likely to vote Republican.

Obama isn't going to have that, he declared, "as long as I'm president." Instead, he would deal with the deficit largely by letting President George W. Bush's tax cuts expire, a move that in itself would wipe out most of the current deficit.

Obama would also use Medicare's purchasing power to drive down prices. That's worked to hold down drug prices in the Veterans Administration. But Republicans prevented that cost-cutting measure from being included in Obama's health care plan.

After Ryan unveiled his proposal, I wrote that it invited a better alternative from Democrats and they owed it to the country to produce it. I think Obama has produced a better alternative although, like Ryan's, his scenarios for deficit reduction sound more rosy than realistic.

In fact, neither Obama's nor Ryan's plans have much chance to pass in their current form. But they do lay down markers for the public to decide.

While Ryan and other Republican leaders cling to tax cuts to solve our deficit woes, the president and other Democratic leaders prefer the tax rates that allowed the economic boom and budget surplus of the Bill Clinton years. Tax cuts versus shared sacrifice? That's the real deficit-reduction debate, and Obama has a good argument to make. Nobody likes to sacrifice but, when somebody has to feel the pain, it might as well be shared by everyone.

Clarence Page is a member of the Tribune's editorial board and blogs at chicagotribune.com/pagespage